The Centre on Saturday reduced the import duty on naphtha, a major feedstock in the petrochemical and plastics industry, to 1 per cent from 2.5 per cent as it sought to soften the inflationary impact of the Ukraine war that has seen crude oil surpassing the $100-per-tonne mark.
The Centre also halved the import duty on propylene oxide to 2.5 per cent and polymers of vinyl chloride (PVC) to 7.5 per cent from 10 per cent to reduce the cost of domestic production of plastic products. Both these commodities are used as raw materials by the various sectors.
The prices of these products had climbed in the international markets following a surge in crude oil price after Russia’s invasion of Ukraine. .
Naphtha prices are now understood to be around $900 per tonne after averaging around $871 a tonne in the January-March 2022 period, a rise of over 20 per cent over the preceding quarter.
PVC prices have shown some moderation amid concerns over a slowdown in China, a major producer.
At a concall with analysts recently, the top management of Finolex Industries said after touching an all-time high of $1900 per tonne, PVC price has come down to $1500 levels. They said the raw material is being “pushed into India” following a slowdown in China.